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51 sales discounts and sales returns and allowances are contra revenue accounts that 4295765

 

51.Sales Discounts and Sales Returns and Allowances are contra revenue accounts that are debited to close the accounts during the closing process. 
 
 

52.Cost of Goods Sold is debited to close the account during the closing process. 
 
 

53.In a perpetual inventory system, the Merchandise Inventory account must be closed at the end of the accounting period. 
 
 

54.The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense. 
 
 

55.A multiple-step income statement format shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classes of items. 
 
 

56.Operating expenses are classified into two categories: selling expenses and cost of goods sold. 
 
 

57.A merchandiser's classified balance sheet reports merchandise inventory as a current asset. 
 
 

58.Expenses related to accounting, human resource management, and financial management are known as selling expenses. 
 
 

59.When a company has no reportable non-operating activities, its income from operations is simply labeled net income. 
 
 

60.A single-step income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses. 
 
 

61.Under a periodic inventory system, purchases, purchases returns and allowances, purchase discounts, and transportation in transactions are recorded in the Merchandise Inventory account. 
 
 

62.The periodic inventory system requires updating the inventory account only at the end of the period to reflect the quantity and cost of goods available for sale and the cost of goods sold. 
 
 

63.In a periodic inventory system, cost of goods sold is recorded as each sale occurs. 
 
 

64.Under both the periodic and perpetual inventory systems, the temporary account Purchases Returns and Allowances is used to accumulate the cost of all returns and allowances for a period. 
 
 

65.Delivery expense is reported as part of general and administrative expense in the seller's income statement. 
 
 

 

 

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